Trade negotiators rarely get to celebrate a victory. The United States, for example, has been negotiating over 15 bilateral free trade agreements, with none concluded since the Korea-US agreement was finalized at the end of 2010. This makes the recently finalized Trans-Pacific Partnership (TPP) agreement between the United States and 11 other countries all the more remarkable. But the TPP still faces major hurdles, not least a divisive ratification debate in the U.S. Congress, which has already become entangled in presidential electioneering. Meanwhile, as WTO delegates prepare for their biannual ministerial meeting in Nairobi in December, they are unable to agree even on whether they should switch off the respirator on the Doha Development Agenda, a multilateral trade round that was initiated back in December 2001, which has been floundering over at least the last seven years.
International trade has doubled as a share of world GDP over the last 50 years. Without it, the global economy would grind to a halt. The highways of trade are much freer today than they were decades ago, but there are still plenty of barriers. If the world is to move beyond the slow growth that has followed the 2007–8 crisis (what the IMF calls the “mediocre new normal”) it will have to continue to chip away at these impediments, or at least prevent the creation of new ones.
One place to start is to address some dangerous misconceptions about international trade. Some of these bad ideas are new, others have been around for a long time and have routinely been disproved. These ideas can impede progress, and if they get into enough of the wrong heads, they are bound to lead to big policy mistakes.
Many developing countries—from China to Brazil to Russia—are struggling and have been over the last two years or so. Among others, The Economist thus concluded that we are nearing the end of convergence, or at least entering an era of much slower convergence, which means that incomes per capita in
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